2021 Index of Economic Freedom

Zimbabwe

OVERALL SCORE39.5
WORLD RANK174
Rule of Law

Property Rights32.6

Judicial Effectiveness32.0

Government Integrity21.3

Government Size

Tax Burden63.4

Government Spending89.4

Fiscal Health58.8

Regulatory Efficiency

Business Freedom41.5

Labor Freedom44.1

Monetary Freedom0.0

Open Markets

Trade Freedom56.0

Investment Freedom25.0

Financial Freedom10.0

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Quick Facts
  • Population:
    • 14.6 million
  • GDP (PPP):
    • $39.7 billion
    • -8.3% growth
    • 0.5% 5-year compound annual growth
    • $2,953 per capita
  • Unemployment:
    • 5.0%
  • Inflation (CPI):
    • 255.3%
  • FDI Inflow:
    • $280.0 million

Zimbabwe’s economic freedom score is 39.5, making its economy the 174th freest in the 2021 Index. Its overall score has decreased by 3.6 points, primarily because of a decline in monetary freedom. Zimbabwe is ranked 46th among 47 countries in the Sub-Saharan Africa region, and its overall score is well below the regional and world averages.

Zimbabwe’s economy sank nearly to the bottom of the Index rankings this year with scores on eight of the 12 Index indicators in the repressed category. Optimism after the fall of Robert Mugabe in 2017 has given way to pessimism as the new government has failed to follow through on promises to improve the business environment. Corruption remains rife, and there is little protection of property rights.

IMPACT OF COVID-19: As of December 1, 2020, 277 deaths had been attributed to the pandemic in Zimbabwe, and the economy was forecast to contract by 10.4 percent for the year.

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Background

The former British colony of Rhodesia became the fully independent Zimbabwe in 1980. A 2017 coup forced out the late longtime President Robert Mugabe of the Zimbabwe African National Union–Patriotic Front (ZANU–PF) and elevated former Vice President Emmerson Mnangagwa to the presidency. Following Mnangagwa’s victory in a 2018 election that was marred by vote rigging and voter intimidation, security services cracked down on the opposition. The government frequently responds to periodic street protests over economic mismanagement and violations of human rights with violence and arbitrary detention. The economy is heavily dependent on mining and agriculture, but political instability and protracted economic crisis have severely damaged the country’s economic potential.

Rule of LawView Methodology

Property Rights 32.6 Create a Graph using this measurement

Judicial Effectiveness 32.0 Create a Graph using this measurement

Government Integrity 21.3 Create a Graph using this measurement

The government enforces property rights in cities but usually not in the case of agricultural land. The land management system is fragmented and inefficient. The judiciary is generally impartial in nonpolitical cases, but government interference in politicized cases hinders the delivery of impartial justice. Endemic corruption throughout government remains a serious challenge, and enforcement of anticorruption statutes often targets political opponents.

Government SizeView Methodology

The top individual income tax rate is 51.5 percent, and the top corporate tax rate is 24 percent. Other taxes include value-added and capital gains taxes. The overall tax burden equals 20.7 percent of total domestic income. Government spending has amounted to 18.8 percent of total output (GDP) over the past three years, and budget deficits have averaged 5.1 percent of GDP. Public debt is equivalent to 11.0 percent of GDP.

Regulatory EfficiencyView Methodology

Zimbabwe has improved the online name search for starting a business and reduced the Harare Municipality business licensing fee. The value added per worker has risen relative to the minimum wage but is still very low. Unsustainable monetary policy has led to a protracted currency crisis; the Economist Intelligence Unit has reported that hyperinflation will exceed 600 percent in 2020, and the government has reimposed price controls on basic commodities.

Open MarketsView Methodology

Zimbabwe has four preferential trade agreements in force. The trade-weighted average tariff rate is 12.0 percent, and seven formal nontariff measures are in effect. The pervasive presence of regulatory barriers severely hampers trade and investment flows. Undue state interference continues to undermine investor confidence. The financial system has suffered from repeated crises, and years of hyperinflation have undercut entrepreneurial activity.

Country's Score Over Time

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Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius772.1
2Rwanda68.3-2.6
3Botswana67.6-2.0
4Seychelles66.32.0
5Cabo Verde63.80.2
6Namibia62.61.7
7Côte d'Ivoire61.72.0
8Tanzania61.3-0.4
9South Africa59.70.9
10Benin59.64.4
11Ghana59.2-0.2
12The Gambia58.82.5
13Nigeria58.71.5
14Uganda58.6-0.9
15Gabon58.11.4
16Senegal580.0
17Madagascar57.7-2.8
18Togo57.53.4
19Niger57.32.6
20Guinea56.50.0
21Burkina Faso56.5-0.2
22Djibouti56.23.3
23Mauritania56.10.8
24São Tomé and Príncipe55.9-0.3
25Comoros55.72.0
26Mali55.6-0.3
27Eswatini55.1-0.2
28Kenya54.9-0.4
29Guinea-Bissau54.91.6
30Angola54.22.0
31Lesotho53.5-1.0
32Cameroon53.4-0.2
33Malawi530.2
34Sierra Leone51.73.7
35Ethiopia51.7-1.9
36Mozambique51.61.1
37Republic of Congo50.78.9
38Chad50.40.2
39Zambia50.4-3.1
40Burundi49.90.9
41Equatorial Guinea49.20.9
42Liberia49.20.2
43Democratic Republic of Congo49-0.5
44Central African Republic48.8-1.9
45Eritrea42.33.8
46Zimbabwe39.5-3.6
47Sudan39.1-5.9
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